The French election is almost upon us, and with it a new dawn for France. Coincidentally it also lines up with the start of Brexit negotiations, and a potentially increased role for France in the EU going forward. As such, the election could have a dramatic impact on both French business and economic interests across the continent.
The current frontrunner in the election bid is Emmanuel Macron, a centrist who was relatively unknown until a few short years ago. Yet he came to prominence as an economy minister in the current Socialist government, whose President Hollande will leave office with one of the worst approval ratings ever. So why is Macron popular, and what would his France look like?
France has had some economic difficulties in recent years. Outgoing President Francois Hollande was elected on a platform of imposing taxes on the rich, and generally reviving the economy. But he was largely unsuccessful, and many of his flagship policies (such as the 75% super tax on the highest earners) fell by the wayside.
When it came to forming a new economic platform halfway through his term, Hollande turned to Macron. The 35-year-old former investment banker had served as an advisor to Hollande during his election campaign, before serving as the Socialist Party’s deputy secretary general. Suddenly he was thrust into the key position of Minister of Economy, Industry and Digital Affairs, and was seen as being groomed for future leadership.
This happened significantly sooner than Hollande – or anyone else – would have expected. Macron resigned from government in 2016 to form his own political action group, En Marche! (‘On The March!’ or ‘Forward!’), quickly gathering over 100,000 members. Less than a year later he was announcing his leadership bid.
While his primary rival Francois Fillon has been struck by a major financial scandal, Macron only recently revealed his manifesto, and looks to have seized his moment. Having avoided any major battles, polls currently suggest that Macron will comfortably win both rounds of voting.
What’s key is that Macron is seen as not just distinct from Hollande’s government, but from almost anyone else’s position on the economy. Macron is a staunch moderniser, and wants to go further than anyone before him in changing the entrenched values of France. Key among these are the ability for businesses to replace employees more easily, and the potential increase of hours in an average working week, including working more Sundays each year.
Normally these ideas would provoke ridicule and even riots, as similar measures have done in the past. But the stubborn nature of economic difficulties – almost half of unemployed people have been without a job for more than a year, for instance – call for desperate measures. And Macron is seen as a far more palatable and socially liberal option than key rivals such as Marine Le Pen, leader of the Eurosceptic National Front.
The frontrunner for many businesses was initially Fillon, whose lengthy government experience and conservative policies made him seem a safe pair of hands. But revelations that he paid his wife and children for work that may not have been completed have tarred his brand, and both businesses and moderate politicians are increasingly rallying to Macron.
Building on his 2015 ‘Macron law’, the presidential candidate has aimed to invest heavily in industry and research, privatise companies in which the government owns a minority share, and reduce government pensions, which are considered far more generous than private companies. He also wants to continue to reform labour regulations, training and unemployment laws, which will please businesses but potentially anger unions.
A strong economic leader is particularly important at such a pivotal stage in European politics. Brexit could lead to considerable strife, as a deal is negotiated and the power balance in the EU shifts. But the potential outflow of businesses from the UK, especially the financial services industry in London, presents an opportunity for France.
The ascent of Donald Trump in the US is already presenting new challenges on the global stage. Not only does France have to contend with an end to the Transatlantic Trade and Investment Partnership (TTIP); it will also have to contend with the US’ dismissal of the Paris Agreement on climate change. As one of the world leaders in ‘cleantech’ and renewable energy, France has a vested interest in maintaining the path towards wind, solar and hydro power.
This is an area in which Macron has considerable experience. As a minister for Digital Affairs, he was at the forefront of France’s recent push to create a thriving startup ecosystem. He frequently appeared at tech gatherings such as La French Tech, which now sends the largest foreign delegation to the annual Consumer Electronics Show.
Investment in French tech startups has increased dramatically in the last three years (up 62% last year to more than $2bn), making France a world leader in technologies as diverse as aerospace, ‘wearables’ and virtual reality. Hyperloop One is building the pods and test facilities for its ultra high-speed transport system in France, while the world’s biggest tech startup campus, Station F, is due to open in Paris this month.
Meanwhile, measures are already underway to help ease the economic transition for whoever is elected. The French economy has been steadily recovering over the last year, and President Hollande has been conducting several trade missions in the final months of his tenure. The most recent is to Southeast Asia’s largest economy, Indonesia, where $2.4 billion has been pledged in return for investment in French aircraft.
As one of the world’s largest economies and a key leader in the new-look EU, France has an opportunity to push on and grow even further. Should Macron be elected, the promised changes should help to make French businesses more competitive, serving to attract greater interest from abroad and bolster the Eurozone. As businesses consider leaving the UK for new European bases, the next President has a chance to lead French business to a bright future.
Former journalist Katya Puyraud is the co-owner of Euro Start Entreprises, specialising in company formation in France and the rest of the EU. Since 2007 Euro Start Entreprises has helped budding digital nomads, entrepreneurs and expanding SMEs to open their companies in over 30 countries worldwide.